Silver Price Forecast: XAG/USD steadies near $37.50 amid growing odds of Fed rate cut

• Silver price may attract buying interest amid rising expectations of a US Federal Reserve rate cut in September.

• CME’s FedWatch Tool indicates that markets are pricing in a 91.6% probability that the Federal Reserve will cut interest rates next month.

• San Francisco Fed President Daly stated that while there are several reasons to begin considering rate cuts.

Silver price (XAG/USD) moves little after registering gains in the previous two sessions, trading around $37.50 per troy ounce during the Asian hours on Tuesday. The non-interest-bearing Silver may attract buyers amid growing expectations of an interest rate cut by the US Federal Reserve (Fed) in September.

According to CME’s FedWatch Tool, markets are pricing in a 91.6% chance of a Federal Reserve rate cut next month, driven by weaker labor market data that has heightened concerns over the US economic outlook.

Federal Reserve (Fed) Bank of San Francisco President Mary C. Daly said late Monday that although there are plenty of reasons to start looking at interest rate cuts, there remains plenty of uncertainty, making it difficult for Fed officials to step into rate trimming too quickly. We can't wait to be certain there is no inflation persistence, need to make a call based on what's most likely, Daly added.

Moreover, the demand of the safe-haven Silver may further appreciate due to rising concerns overthe  Federal Reserve’s (Fed) independence. US Federal Reserve (Fed) Governor Adriana Kugler has given an unexpected resignation, which has provided US President Donald Trump an earlier-than-anticipated opportunity to influence the central bank. This situation allows Trump to nominate a replacement potentially more aligned with his calls for lower rates.

Silver price may find support amid rising trade uncertainties, as Trump's latest round of tariffs on exports from numerous trading partners is scheduled to take effect on August 7. Additionally, traders will closely watch the US ISM Services PMI due later on Tuesday, with expectations for an uptick to 51.5 in July from 50.8 previously.